The principal objective of this project is to evaluate empirically the economic performance of neighborhood health centers (NHCs). Specifically, we will estimate multivariate production and cost functions for the two basic types of ambulatory health care services provided by neighborhood health centers: medical care and dental care. We will also compare health levels in areas (counties) that are similar except for the presence or absence of a neighborhood health center. The objectives will be implemented with a pooled cross-section time-series data set that contains information on inputs, outputs, costs, patient characteristics, and financing of each of the approximately 100 NHCs in the United States. These data are obtained from the quarterly reports submitted by the centers to the Bureau of Community Health Services, Health Services Administration, U.S. Department of Health, Education, and Welfare. The data set will be supplemented with demographic and socioeconomic characteristics of the counties in which the centers are located. These data are obtained from the Area Resource File assembled by the Bureau of Health Manpower, Health Resources Administration, U.S. Department of Health, Education, and Welfare. The methods of procedure will be ordinary least squares multiple regression analysis and its modifications. Our research results will provide useful insights with respect to future government policies to curb the rate of inflation in the health care sector, improve the access to care by low-income groups, and improve the health of these groups.